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House Panel Holds Hearing on Self-Referral

House Panel Holds Hearing on Self-Referral

July 01, 1995

WASHINGTON--The House of Representatives Ways and Means Subcommittee
on Health heard opinions on what sort of final regulations should
be issued concerning the recently expanded self-referral laws:
namely, enforce the bill as written (HCFA's view) or add major
exceptions to the bill (the AMA's view).

Rep. Bill Thomas (R-CA), subcommittee chairman, called the hearing
on the Omnibus Budget Reconciliation Act (OBRA) of 1989, which
bars physicians from referring Medicare patients to a laboratory,
x-ray, or other medical facility in which they have a financial
interest.

OBRA 1993 (the Stark law) expanded these restrictions to include
additional health services and made the law applicable to Medicaid
as well as Medicare.

Although the law is in effect, the Health Care Financing Administration
(HCFA) has yet to issue final regulations. "Without regulations,
compliance with the law isn't just a challenge, it's almost impossible,"
Rep. Thomas said.

Moreover, he contends that the law needs review because its prohibitions
may be at odds with efforts to encourage physicians to participate
in more cost-effective managed care arrangements.

The law and its amendments may have had a "chilling effect"
on physicians participating in legitimate and worthwhile health-care
competition, he said. "In some ways, it may already be antiquated,
because managed care is a reality for the private sector and is
growing rapidly for public programs."

Kathleen A. Buto, HCFA associate administrator, told the subcommittee
that preventing inappropriate utilization by prohibiting self-referral
is one part of HCFA's effort to fight fraud and abuse.